Positive Engagement?

Dear Steve -

This issue keeps coming up, in part because we are so well acculturated to the "need" for corporations. I am pursuing it because I think that this discussion is so important, in that the solutions we seek do not - cannot - reside in the sources of the harm. There is certainly complexity and nuance, but the bottom line is crystal clear: corporations are driven by profit, period. They cannot exist without it and consequently they will do whatever necessary - greenwash and beyond - in pursuit thereof. There are many corporations whose only possible socially responsible act would be to dissolve - clearly this will not happen voluntarily, no matter how beneficial it may be. The entire point of corporate structure is to be *independent* of any individual or group of individuals. If "socially responsible" corporate behavior is profitable, fine. If it isn't, the responsible people will be removed in the service of profit. It cannot possibly work any other way, that's the way the rules are written. Aside from acquisitive behaviors regardless of consequence, the even greater difficulty with corporate structure is that it allows corporations to govern and make decisions far beyond the reach of the people affected. This is accomplished in no small measure by buying politicians, not only with money, but with the seduction of joining an exclusive club whose members merit perks denied 99.999% of the world's population, and whose revolving-door behavior makes them part of both public and private sectors - Mitt Romney and George Bush are excellent examples of such atrocious human behavior, but they are by no means unique. Here is the kind of corporate ruling of the world that Korten has talked about, and it was well established by the turn of the 17th century with the incorporation by the British oligarchy of the East India Company - which governed, enslaved, exproporiated and slaughtered on behalf of the British Empire. Things haven't changed much - we still do that in the American Empire, in the form of Halliburton, Blackwater, Monsanto, Cargill, Exxon-Mobil, Lockheed-Martin, General Electric, and many many others, with a little help from "Free Trade" agreements so conveniently negotiated on their behalf (or the Kyoto-type protocols crippled on their behalf). Now, there are certainly corporations that are less destructive, and whose human parts are attempting what we call "sustainability" and "social responsibility." That's all well and good - better a "responsible" one than the other kind. But to ensure such responsibility we must decide that corporations have *no* constitutional rights, and such legal rights only as specifically granted by special - not general - charters, each an act that is approved by some democratic mechanism. There must be no existence in perpetuity, and no limited liability - such was the case in this country for the first few decades. In other words, corporate interests should be entirely excluded from governance, because business decisions have no place whatsoever in a polity that serves its population. The conflict of interest is irreconcilable. The proof is how terrible our material-driven decisions have been for a long time, probably centuries. As a result of unintended but not unpredicted consequences (because we have broadly ignored the predictions or tried to force-fit them into a failed economic model does not mean that they have been without merit), we have likely passed climate tipping points, not to mention many other pollution and resource-driven crises. We have little time to change, and local adaptation looks like the only road to survival if there is any at this point. Existing businesses cannot possibly participate rationally in the decisions we have to make because such decisions will mostly be contrary to current profit-generating interests. I think that we should move our conversations to these very uncomfortable places as fast as we possibly can, and this list is an excellent forum for that: fostering sustainable behavior at the deepest possible level, such that unsustainable behavior would be as unthinkable as nuclear holocaust (doesn't mean it won't happen, unfortunately). Our priorities are adapting to and mitigating the effects of massive resource depletion, disrupted and hostile climate, species extinctions three orders of magnitude beyond the background rate (including crucial plankton at the bottom of the food chain), widespread carcinogenic and genetic toxicity, and lethal pollutions of all kinds. These are the priorities regardless of anybody's bottom line. All of these unintended consequences are the results of business decisions and cultural manipulations to create consumers to aid and abet said decisions. We simply cannot go on this way, this system is irretrievably broken, and there is no fixing it, no matter what patina of corporate social responsibility one might apply. The last thirty years should prove that to anyone who cares to take more than a casual look. Perhaps you can lift the Trimtab veil, as we all need to lift our respective veils (and I do not for a moment question your good intentions) and see that the physical reality bearing down upon us is so terribly dire, and that nature will prevail in very unpleasant ways if we don't listen up (at this point, perhaps even if we do). Any unsustainable entities will fall apart, and that which was once sustainable may be rendered sustainable no more. If we're serious about fostering sustainable behavior we have to address the social and economic root causes and stop pretending that tweaking is of any consequence. There is a lot of discussion of well-intended tweaking here, and I think that's in part because we are all stymied by the magnitude of the problem. Nonetheless, I know that all of us on this list are serious and struggling, and I would propose that we try figure out how to step out of our binding cultural box and apply ourselves to the next very difficult step. Corporations as currently constituted have no place whatsoever participating in these decisions, "socially responsible" or not.

Best,
Adam

If you need information on climate and energy depletion I would be happy to supply it to you.

Dear FSB members,

Having just returned from the first World Entrepreneurship Summit (http://www.wes08.net ) - where 450 entrepreneurial business leaders from Europe, America, Africa, and elsewhere met to discuss how the entrepreneurial business mindset can contribute to creating a sustainable future - and as someone who has been involved with Business for Social Responsibility ( http://www.bsr.org ) since 1996 and The UN Global Compact (which Kofi Annan launched at Davos in 1999 - http://www.unglobalcompact.org ) since late 2000, I want to state for the record that the corporate social responsibility (sometimes called corporate citizenship) movement is (a) very real (ie. not devoted solely to "green washing"), (b) a very important area of study for anyone aiming to create a sustainable future because of where its leading voices are taking it, and (c) poised for a breakthrough here in America (where I will admit it is woefully under reported and, as a result, under appreciated for what it can potentially contribute to solving society's problems). Yes, green washing does exist. There will always be people who take advantage of things being done by well meaning people, because they are corrupt in their hearts. While some make the case that corporations can do "no good" (essentially what David Korten said in 1995 with "When Corporations Rule the World" (revised 2001)), I recommend that members of this list consider the possibility that even those aspects of society which did not help make things better in the past CAN help make things better in the future. And, in the case of corporations, I would recommend that people keep in mind that corporations are fundamentally run by people... not by heartless and soulless machines. And even cold-hearted people can change. That's the transformation portrayed each Christmas in Charles Dickens' "The Christmas Carol"... and in many more contemporary works. And if you think the Wall Street will prevent this "change of heart" from happening, I invite you to check out the Principles of Responsible Investing initiative, which The Global Compact launched in 2006 - http://www.unpri.org Those who don't allow for the possibility that the business community can be part of the solution, are - in my humble opinion - actually part of the problem. Because - as has been demonstrated in as diverse historical events as the civil rights movement and the conquest of space - if we don't allow in our minds for the possibility that something can happen that's never happened before, we will never support the development of the new ways of doing things required to make the impossible possible. Have hope, everyone. The business world is changing. Maybe not as fast as some would like; but - as the saying goes - you can't turn an ocean liner on a dime. Here are a few other, corporate social responsibility related links... http://www.sbnow.org/ http://www.sustainablebusiness.com/ http://www.envirolink.org/ (click on "sustainable business" link)

Steve

Steven G. Brant
Founder and Principal
Trimtab Management Systems
303 Park Avenue South, Suite 1413
New York, NY 10010
(646) 221-1933
Skype: stevengbrant
[email protected]
http://www.trimtabmanagementsystems.com

You might want to read-up on the Devonshire Initiative arising from a national roundtable on the extractive industry and corporate social responsibility. http://www.embassymag.ca/html/index.php?display=story&full_path=/2007/october/31/mining/

Michel Casselman

Sustainable Development/
Developpement durable
Legislative Services/
Services legislatifs
Department of Justice Canada |
Ministre de la Justice Canada
275 Sparks Street, Room SAT-4018 |
275, rue Sparks, piece TSA-4018
Ottawa (Ontario) K1A 0H8

Hi Adam,

Thus, I think that the question about sustainable behavior is somewhat reframed: it becomes one of sustainable culture, where sustainability is the taken-for-granted norm, not an uphill battle every step of the way. Our task, then, would be to develop ways of actively changing the context, the culture itself, which could give momentum to many behavior changes resulting from the new context, and render unsustainable profit-driven destruction unthinkable. This is pointing towards the Transition Town experiments being developed in the UK, the first such being Totnes in Devon. The whole concept is to relearn what we've forgotten, and simultaneously to benefit from modern technology, by re-creating a whole community of new skills, inter- and self-dependency, and even a new, restricted-use currency. The essence is to develop communal projects (like solar water-heating, other renewable energy schemes, allotments ....) whose output is available to all on a shareholder basis. See http://www.transitiontowns.org/Totnes/

Elizabeth Griffin
(Victoria, BC)

At 06:51 AM 1/13/2008 -0800, Adam Sacks wrote, in part: Corporate behavior is one of the key obstacles in what we're up against in dealing with fostering sustainable behavior, and unless we have a good grasp of this context we will continue to imagine that the mechanisms which created our eco-problems will fix them. Let's face it, it's simply impossible.

Dear Adam and Friends--

And let's not forget the rest of the military-industrial-government-university complex. The USA spends more money on its military every year than the entire rest of the world combined! This is not exactly sustainable. All of the Democratic candidates have stated that they would build up the military even more, so regardless of who is elected we will get more of the same. The government is owned by big business--look at the yahoos in the White House. And their successors won't be any better--the lobbies of the big industries manipulate and control the congress and get exactly what they want in the way of price supports and tax concessions and relaxation of environmental laws and on and on. And the universities, for all of the "greenness" uttered, support GMO with unknown consequences and the latest composite materials for fighter jets and nanotech not proven to be safe and they all toss the precautionary principle aside and take money from wherever.... 'Nough of ranting for now...

Tom

Tom Shelley
118 E. Court St.
Ithaca, NY 14850
607 342-0864
[email protected]
http://www.myspace.com/99319958

Hi Peter -

I think we're in basic agreement. The "American Way" is all well and good in theory. The reality of the physical world commands other behaviors. Nature always prevails - we can stick to Locke (who was no egalitarian) on our way off the cliff, or find another way. As far as I can tell local sustainability and self-sufficiency, which has more or less kept homo sapiens going for several hundred thousand years despite many bumps in the road, is where all signs are pointing (of course with possibilities of sustainable travel and trade - there's no need to cast off many of the valuable lessons we've learned). The last few hundred years of mercantile empire culminating in planetary fossil toxicity are but a brief nervous tic in gaia's evolution, and as important as we think we are, the physical world is indifferent to our ambition and folly. Thus, I think that the question about sustainable behavior is somewhat reframed: it becomes one of sustainable culture, where sustainability is the taken-for-granted norm, not an uphill battle every step of the way. Our task, then, would be to develop ways of actively changing the context, the culture itself, which could give momentum to many behavior changes resulting from the new context, and render unsustainable profit-driven destruction unthinkable.

Cheers!
Adam

Thanks Adam,

I found the argument that the American polity is built on the Lockean ideal that individual merit allows for hierarchical stratification convincing (the book I quoted). For all the lip-service we give to equality and egalitarian thinking in America, we have elected and implemented, over time, and continuously reinforced, a body politic that aims to protect minorities and sub-classes from their own ignorance (hence the appeal of Clinton's call for status quo change with the veiled statement "don't let a minority reign and ruin our collective bargain; I'm just a woman but I won't dismantle it all"). The legal framework and the political structure aims to protect establishment interests of big government and big business and only periodically does lip-service to the little guy in certain progressive politics. Yet, we all buy in to the process because we believe in our individual right to amass wealth and to achieve the American dream of independence through money. However we malign Bill Gates, secretly (or openly), as Americans, we wish we were him and we refuse to change our system to allow for the discontinuation of his robber baron type. Thus it is with sustainability and the ecological movement; environmentalism is possible in the United States only when it allows for profit generation and wealth amassment. To see environmentalism as a collective effort aimed toward social improvement we would have to dispense of the Lockean system and seek a more socialist compact - a decision we have faced consistently in our history and consistently declined.

Peter

Dear Eric et al. -

I think it's very important to deconstruct the phrase "corporate citizenship." Corporations are not people and are therefore not citizens - in any sense of the word. While legal machinations during the last 130 years or so in the U.S. have granted corporate entities most of the constitutional and legal rights of people, corporations are actually quite different. They exist independent of the people in them, they "live" in perpetuity, and their liability is limited. These qualities allow them to amass vast quantities of wealth and the power that goes with it with no consequence for the owners (shareholders) for whatever crimes (legal or illegal) the corporation may commit. Unlike human beings, who have complex feelings, relationships and motivations - including senses of morality, justice and altruism - corporations have one and only one motivation: the bottom line. This is in effect the law of the land (which we have unfortunately exported to other countries, so the South African constitution, an otherwise advanced rights-based document, includes corporate personhood; the Venezuelan constitution, an even more affirmative rights-based document, does not). Given that profit is the only driver of corporate behavior and that "corporate social responsibility" can be nothing more than a P.R. veneer (ask yourself, if a corporate decision has to be made between going out of business or being "green," what do you think it would do?), it is clear that corporations have no role in citizenship or participating in governing decisions or lobbying in any shape, manner or form. It is eminently apparent that such does not work for planetary benefit by the very existence of the FSB group - unsustainability, the hallmark of corporate behavior, while not unique to current human groups, has been taken where no one has ever gone before and with catastrophic consequences. Corporate behavior is one of the key obstacles in what we're up against in dealing with fostering sustainable behavior, and unless we have a good grasp of this context we will continue to imagine that the mechanisms which created our eco-problems will fix them. Let's face it, it's simply impossible.

Cheers,
Adam

Ramsey Hart asks about ethical behavior and positive engagement: Positive Engagement - Use Sustainability Reporting Tools

The strength of our economic and legal system is that it is founded on the concepts fairness, justice, freedom, life, liberty and individual pursuit of happiness. No where does our system endorse allowing one person to harm another just to maximize profit. That concept is NOT embedded in the Magna Carta, Constitution or the Bill of Rights. Greed is NOT good; exploitation is NOT protected behavior. These are the fundamental reasons why sustainability reporting is so effective; publication of performance indicator metrics exposes exploitive behavior to public scrutiny. So ask your mutual fund investors to require full disclosure of sustainability performance indicators / criteria and full reporting of metrics against those criteria. And if they refuse to make full disclosure of sustainability performance; then go public. The public hates cover ups even more than the public hates improper behavior. It is that simple. Regarding Corporate Exploitation -- there are no Free Markets Advocates of less government of corporate or private behavior have corrupted these basic concepts and need to be constantly reminded of the fact that "free markets" do not exist within the framework of market economics and capitalism. Somebody has to establish rules that define markets and market behavior. Those rules can be established by government or by an NGO or by the corporate entity itself. Go back and read the bible of capitalism written by Adam Smith ---"The Creation of the Wealth of Nations ..." to understand the role of rules and regulations in a market economy. These concepts have been horribly corrupted by those who seek private gain at public expense. This must stop. The legitimate role of government in a market economy is to establish rules that protect the "commons" or the public interest and to then enforce those rules fairly and with justice. The vast majority of business executives and politicians think of microeconomic theory when they start spouting off about free markets. They think macroeconomic theory is limited to government control of financial matters, such as the prime rates and money supply, and completely ignore the legitimate government role of protecting public health, safety and welfare -- and now conserving the environment. Demand Full Disclosure of Facts and Don't Back Down The way to win any debate on this topic is very simple. Expose those who resist regulation that protects the commons -- air, water, ecosystems, etc. - with facts. Then simply compare those facts against the values the other side says they believe in and follow. Obtain full disclosure and it will not be difficult to show that those who are exploiting somebody or something - labor, public resources, etc. - are not practicing the values they claim to support. Once the facts are disclosed they will either have to admit hypocrisy or change behavior. Since most people do not like to be label hypocrites they usually change behavior. Finally, be positive and attack facts, not people - but don't be afraid to point out damning facts, inconsistent logic, hypocrisy and selfish behavior. And never back down.

David E. Bruderly, PE
Bruderly Engineering Associates, Inc.
920 SW 57th Drive Gainesville,
Florida 32607-3838
352-377-0932
www.cleanpowerengineering.com
www.bruderly.com 

If you are talking about the U.S. in particular, there is an inherent dichotomy in a system that proclaims equality but praises hierarchical individualism. The result is the encouragement of capitalism of the type you describe (I'm not valuing here). I'm reading at the moment a fascinating and excellent study on the semiotics of this topic in: Charles F. Abel and Arthur J. Sementelli, Justice and Public Administration, University of Alabama Press, 2007.

The business ethics network may have some good information on this. Businessethicsnetwork.org They are an organization focused on sharing knowledge and tactics for improving corporate citizenship. I think you are right that this mutual fund is making excuses. Companies should be rewarded for action, not talk.

Eric